Who assigns the new HS codes?

Updates to the Harmonised System happen every five years and are made by the World Customs Organisation (WCO). The System serves as the international basis for customs tariffs in more than 200 countries across the world and in the HS 2022 update, over 370 new or amended HS codes are being introduced and more than 100 deletions affecting a range of goods from lighting to woven coats and wooden furniture. The changes will affect thousands of importers and exporters globally. In the UK for example, there were 7,500 importers of lighting products in 2020, all of whom need to be aware of the changes that have been made to their product codes.

Find out more about what HS Codes here.

What are the consequences of non-compliance?

Assigning the correct HS code to your goods ensures you are compliant and ensures your goods arrive at their destination without delay and without additional fees. Goods without the correct new HS codes will be delayed in customs, will require payment for storage and will contribute significant paperwork to move them compliantly to their destination.

What’s changing specifically and in what category?

Here is a broad summary of the categories affected by the changes.

1. Technological advances in materials used in some common goods mean that the current subheadings do not effectively represent the materials now being used in different types of machinery or electrical products. These relate to glass fibres as one example. The changes allow improved classification for these new types of advance materials
2. Keeping with advances in technology, a major change is the increased visibility for popular new gadgets and new technologies such as drones and smartphones, all of which have now be assigned new category codes
3. COVID has had an impact on changes in 2022 putting more of a focus on health-related goods and making them simpler to classify to ensure the rapid deployment of tools to help with infectious disease outbreaks in the future. Changes in classification for diagnostic kits is one example of a code change
4. Global environmental concerns have also influenced the changes. Goods manufactured using tropical woods are now made even more defined with the addition of improved codes. There has long been debate over the source of tropical woods, especially those claiming to be sustainable, and this code change reflects retailer/consumer demand to understand the exact properties of wood products
5. As the sustainable fashion movement steams ahead, changes have been brought in that create new subheadings for fabrics, to better categorise different types of garments. For example, categories that distinguish between overcoats and jackets
6. Edible insects have been considered a possible lasting alternative to animal protein for some time now. In the HS 2022 edition, this trend is accounted for with many code changes taking place for insect categories and products moving from one chapter to another. Within foodstuffs, certain products have changed significantly including yoghurt that now reflects the scope of types available including yoghurt with spice and yoghurt containing plants, etc

There are many complex changes brought in with HS 2022. Our leading TariffTel solution, supported by our expert team, ensures easy, automated customs classification to take the hassle out of navigating these changes and includes alerts to customers about changing codes.

Get in touch and a member of our team can talk you through our TariffTel solution and find the right support for your business

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The cost of using the wrong custom code for importers really does come with a high price as this example reveals! 

How to avoid assigning the wrong tariff code? 

Assigning a Harmonised system (HS) code or tariff code is not as simple as just checking a directory. Over 200 countries including the UK, United States and Canada base classification on the World Customs Organisation’s Harmonised System which is a standardised listing of commodities, with a corresponding six-digit code number for each. The Harmonised System was updated on 1st January 2022. The United States used the Harmonised System as the basis for its Harmonized Tariff Schedule (HTS). HTS codes are ten-digits long with the first six-digits coming from the HS and the remaining four unique to the United States. Canada maintains its own ten-digit based system, known as Customs Tariff. 

It’s complex, and different county by country as you can see. Tariff codes can also be updated regularly so it pays to work with a customs classification solution like TariffTel that checks daily for updates from the WCO (World Customs Organisation) and implements them in a timely manner into the TariffTel system. 

Understanding the main properties and function of a product 

There are many circumstances in which a product can seem to fall under multiple categories and this is where use of the six General Interpretive Rules (GIR Rules) for classifying a product are useful.  

Rule three is to support classifying for mixture of products. What is the essential characteristic of the Product? Should I classify as 1 Product and use the last numerical Tariff code or should the Product be broken down into separate items. 

Take a Plastic-Coated Wash Bag and inside the bag is a Soap and a Sponge. 

Soap Bar – 340130 – duty 0% 

Sponge – 392490 – duty 6% 

Plastic Coated Wash Bag  420292 – duty 8% 

This Product should be broken down as you could use the Plastic-Coated Wash Bag again. 

As you can see the duty rates on all items are different and are an importance consideration for a retailer when importing thousands of these products. 

Determining a product’s main function plays another important role in assigning tariff codes. If you were to just use the Tariff Book in isolation it would be very easy to incorrectly classify a Sports Bra versus a Crop Top. 

What is the difference between these two products? 

To be classified as a sports bra under heading 6212, it has to have a clear definition of cups or separation of the breasts. The separation can be in the form of clear individual cups or merely stitching or gathering of material between the breasts. There is a clear difference in duty payments depending on which code is appropriately assigned. 

Sports Bra – 621210 – 6% duty 

Crop Top – 621142 – 12% duty 

Using TariffTel and working with our expert customs classification team, we take the time to access all the relevant data to ensure our database, which is product led, is accurate. 

Assuming all countries follow the same rules 

Assuming all countries are the same is a common pitfall we see in assigning HS codes. There are different Tariff books for different countries. 

For example, Flip Flops with uppers of leather or composition of leather have a varying duty whether you’d importing into the UK or US.

Import into UK – 640510 – duty 2% 

Import into US – 640510 – duty 10% 

What happens if you can not decide on the correct code? 

BTI stands for Binding Tariff Information. This is when companies are unsure of what Tariff Code to use and they ask for advice from a National Customs Authority. This authority provides the Tariff code and the relevant duty. All these are stored for other businesses to use.  

In the United States, they use Cross Rulings which work in a similar way. We have access to all this information and use on a regular basis to cross check our Tariff Codes. 

Find out more about our Tarifftel solution here to relieve the headache of customs classification 

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What does a HS code look like? 

A HS code structure is based on the chapter number, heading and subheading codes of the HS nomenclature.  

For example, HS Code 620520 would therefore comprise of the following: 

• 62 (Chapter) – Articles of apparel and clothing accessories, not knitted or crocheted 
• 05 (Heading) – Men’s or Boy’s Shirts 
• 20 (Subheading) – Of Cotton 

All countries using the HS will publish their own tariffs using this universal code. HS Codes are required for export and are used by customs to classify the product being shipped. That way it can accurately calculate taxes and duties and apply any necessary restrictions. 

If you don’t include the HS code on the commercial invoice and other shipping documents, you risk the receiver paying the wrong tax and could possibly delay the shipment. 

How do I get a HS code for my product? 

You can find a HS code by using as online HS code search tool or the Tariff Book. But the accuracy of these tools relies on your understanding of how best to use these tools, and the product description you have. Without prior knowledge and the right level of detail, the code these tools provide are not necessarily correct.

How to provide a good description 

The key to successful classification is providing a clear description of the goods you are shipping. This means stating clearly what your goods are, what they are made of and what they are used for. A clear description will provide the correct duty and customs tariffs.  

Why use an online search tool like TariffTel for customs classification 

Unlike other tools, TariffTel is not simply a tool that searches an electronic version of the HS book, but a solution that allows you to focus on the characteristics of your item. Our unique approach to classification provides accurate results using our proprietary data that has been interpreted from the HS books and their explanatory notes – so you don’t have to.  

TariffTel allows you to: 

• Obtain the HS Code for export and the Tariff Commodity Code for import for the United States, United Kingdom, European Union, Canada, Australia, and many more 
• Easily find your item using our intelligent search and by answering questions specific to customs requirements for your item 
• Receive an email of the classification for your records 
• Registered users can review their classification history online 

Try TariffTel to find HS Codes for 1 – 1,000+ SKUs

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Companies often neglect their classification or do not have a robust process to classify their products, which might result in significant costs, e.g. wrong amount of duty being paid or improper use of free trade agreements. With our customs classification platform, TariffTel, we have helped companies who were struggling to achieve only 60% to 70% classification compliance to reach 100%.

Classifying products accurately requires knowledge and obtaining the necessary information on the essential characteristics for customs. We address these requirements directly. At the heart of TariffTel is the knowledge, master tables built and maintained by our highly skilled team, enabling non-technical people to understand quickly what information is needed. Once the information is fed into TariffTel, a tariff code is automatically assigned.

It is easy to mis-classify products

We corrected a tariff code for shoes for our customer who had misclassified the item due to missing information. When classifying footwear you need to classify by type of footwear, parts of footwear and the materials in footwear that the “upper” and “sole” are made from. Other characteristics such as whether the shoe covers the ankle, the size, the height of the heel, and whether it’s intended for men or women all need to be factored in. The main issue with our customer’s shoes was with leather uppers being misclassified under textile or plastic/rubber uppers. They were overpaying duty by 9% on one footwear product leading to a significant overpayment of £120,000.

Poor compliance leads to higher occurrences of duty over payments. How compliant are you? Read more about the high price of using incorrect tariff codes.

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